What is World Bank Group?
The World Bank Group consists of five closely associated institutions, each institution having a distinct role to play in the mission to fight poverty and improve the living standards for people in the developing world. The institutions are:
1. International Bank for Reconstruction and Development (IBRD)
This aims to reduce poverty in middle-income and credit worthy poorer countries by promoting sustainable development through loans, guarantees and advisory services.
2. International Development Association (IDA)
This provides highly concessional financing to the world’s poorest countries in the form of interest free credits and grants.
3. International Financial Corporation (IFC)
This aims to promote economic development through the private sector.
4. Multilateral Investment Guarantee Agency (MIGA)
This helps to promote foreign direct investment in developing countries by providing guarantees to investors against non-commercial risks.
5. International Centre for Settlement of Investment Disputes (ICSID)
This helps encouraging foreign investment by providing international facilities for conciliation and arbitration of investment disputes.
Initially, IBRD was nicknamed as World Bank. The term now has become official shorthand for IBRD and IDA. Both IBRD and IDA function similarly except for their target group of beneficiaries. They share the same staff, report to the same senior management and apply same standard when evaluating projects. Therefore, when the term World Bank is used it refers to both the institutions. When the term World Bank Group is used it refers to all the five institutions.
The three institutions IBRD, IDA and IFC are linked together by common Board of Governors. Separate Board of Governors exists for MIGA. ICSID has Administrative Council. Heading the management of all the five institutions is the President of the Group.
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